The Toro Company to Acquire The Charles Machine Works, Inc.
Apr 10, 2019
The Toro Company announced that it has entered into a definitive agreement to acquire privately-held The Charles Machine Works, Inc., an Oklahoma corporation and the parent company of Ditch Witch and several other leading brands in the underground construction market, for $700 million in cash subject to certain adjustments set forth in the definitive agreement.
The transaction is subject to regulatory approvals and other customary closing conditions and is currently anticipated to close before the end of Toro’s fiscal 2019 third quarter. More detailed information regarding the transaction is included in an investor presentation available at the Toro Company.
Headquartered in Perry, Oklahoma, Charles Machine Works designs, manufactures and sells a range of products to cover the full life-cycle of underground pipe and cable, including horizontal directional drills, walk and ride trenchers, utility loaders, vacuum excavators, asset locators, pipe rehabilitation solutions and after-market tools. The company, known as “The Underground Authority” for their deep understanding of the structures and systems in those markets, and the most important needs of underground construction professionals, generated calendar year 2018 revenues of approximately $725 million.
“The addition of Charles Machine Works will further strengthen our portfolio of market-leading brands supported by talented employees, a commitment to innovation, a best-in-class dealer network and long-standing customer relationships,” said Richard M. Olson, Toro’s chairman and chief executive officer. “As an organization, Charles Machine Works aligns well with and will contribute to our own strategic priorities of profitable growth, operational excellence and empowering people. The company expands our business in a meaningful way in an adjacent category we know well through our own specialty construction business and in a market that is attractive given the potential for growth in addressing both aging infrastructure that is currently in place and new infrastructure that will be needed to support next generation technologies like 5G.”
“Culturally, our two organizations are very well aligned and, in our past experience, that has been essential to the success of a business combination like this. We share similar people values, performance expectations, business models focused on innovation, brand and channel, and strong community ties. With its rich multigenerational family legacy, commitment to its employees and market leadership position, we have respected and admired Charles Machine Works for a long time. We were excited when joining forces became a possibility, and we know that both companies will be stronger together.”
“Our success is the result of years of hard work and an unwavering commitment to developing innovative solutions for customers,” said Rick Johnson, Charles Machine Works chief executive officer. “From developing the world’s first service line trencher in Perry, Oklahoma, to today’s robust Ditch Witch dealer network, our family of companies is well-positioned to join The Toro Company’s family of brands. We look forward to building upon our founder’s legacy of best-in-class offerings in the expanding underground construction market.”
Toro expects to finance the transaction with a combination of cash on hand and debt, including from additional financing arrangements and borrowings under its existing credit facility.
The all-cash purchase price of $700 million represents a multiple of approximately eight times Charles Machine Works’ calendar year 2018 EBITDA, including $30 million of anticipated annual run-rate cost synergies phased in over three years, that Toro intends to achieve through opportunities in purchasing, manufacturing best practices and administrative efficiencies.
Toro expects the transaction to be immediately accretive to EPS excluding purchase accounting adjustments and transaction related expenses.
About The Toro Company
The Toro Company is a leading worldwide provider of innovative solutions for the outdoor environment including turf maintenance, snow and ice management, landscape, rental and specialty construction equipment, and irrigation and outdoor lighting solutions. With sales of $2.6 billion in fiscal 2018, Toro’s global presence extends to more than 125 countries. Through constant innovation and caring relationships built on trust and integrity, Toro and its family of brands have built a legacy of excellence by helping customers care for golf courses, sports fields, public green spaces, commercial and residential properties and agricultural operations.
About Charles Machine Works
Charles Machine Works is The Underground Authority—a family of companies delivering the most advanced equipment and solutions for underground construction and service in the world today. Its family includes Ditch Witch®, Subsite® Electronics, DW/TXS®, HammerHead®, Radius® HDD, American Augers®, Trencor® and MTI® Equipment. Together, the Charles Machine Works family of companies offers the most complete line of solutions for the full life-cycle of underground pipe and cable.
More News and Articles
Mar 27, 2024
News
USU Study Looks at Water Main Break Rates in the U.S. and Canada
Report Highlights Correlation Between Material and Diameter
Mar 26, 2024
News
Update BE-21: New Material in Course and Modules on Trenchless Pipe Installation
Online training on the topic of pipeline installation in civil engineering: Trenchless technology for underground drainage construction can be a resource-efficient, environmentally friendly, time-saving, and cost-effective alternative to open cut methods. The UNITRACC e-learning course "Utility Tunnelling" has been enhanced …
Mar 25, 2024
Article
Bacteria as a new weapon in wastewater treatment
In early November, San Diego based startup Aquacycl officially opened its first European office and test center at the Water Campus in Leeuwarden. The Netherlands Foreign Investment Agency (NFIA) and the Investment and Development Agency for the Northern Netherlands (NOM) …
Mar 22, 2024
News
A superior HDD offering
Building on its relationships with leading horizontal directional drilling companies, TRACTO Australia has delivered three new rigs to operator Superior HDD.
Mar 20, 2024
News
New portable water filtration technology could improve access to clean drinking water worldwide
The University of Texas at Austin has developed an injectable water filtration system with the aim to aid the over two billion people worldwide who are without clean drinking water.
Mar 18, 2024
News
Global Student Innovation Challenge Calls on Next-Generation Leaders to Tackle Water Security
High School and University Students Worldwide Invited to Expand Water Access and Community Resilience
Mar 15, 2024
News
New water treatment wins Prestigious Award
Introducing a advancement in water treatment, developed by Cardiff University researchers in collaboration with Origin Aqua, the FreeOxTM technology has garnered acclaim by winning a prestigious challenge award at the World Water Tech Innovation Summit. This single-step process not only …
Mar 13, 2024
News
Satellite-based river monitoring technique could provide early warning of flooding
A satellite-based method for monitoring the flow of rivers from orbit could provide a valuable early warning system for flood risk, University of Glasgow researchers have claimed.
Mar 11, 2024
News
Revitalising infrastructure with HDD
Through the use of horizontal directional drilling, TasWater is delivering a new sewer pipeline to improve sewer and stormwater transfer capacity in Launceston, Tasmania.
Mar 06, 2024
News
Picking up the pace on climate action: Building momentum from COP28
At the halfway point of the Paris Agreement, the legally binding international treaty on climate action, average global temperatures are already hitting 1.8°C above pre-industrial levels and future projections are stark. At COP28 in December, we could not escape the reality …
Mar 01, 2024
News
Luminescent sensor detects ‘forever chemical’ pollution in water
Researchers in the UK and Germany have developed a new approach for detecting pollution from ‘forever chemicals’ in water through luminescence.
Feb 28, 2024
Article
BETT installation demonstrating GHG emissions reduction of wastewater treatment
This study presents BioElectrochemical Treatment Technology (BETT) as a new wastewater management solution toward the Net-Zero future. The results reported herein were collected from a BETT pilot system installed at a large brewery in Los Angeles, CA, United States processing …
Contact
Ditch Witch
1959 W. Fir Ave.
OK 73077-0066 Perry
United States
Phone:
+1 580 336 4402
Fax:
+1 580 336 3458